Many municipalities have goals of improving air quality, reducing traffic congestion, and increasing transit use. The federal government asserts similar goals. However, until recently federal policies providing greater tax breaks to car commuters than transit commuters have thwarted these goals. In 2016 the nation achieved parity in what is called the commuter tax credit. The transit tax credit rose from $130/month to $250/month, equal to that for car commuters. Significantly, this benefit is now permanent and indexed to the cost of living. However, equivalency in financial incentives does not fully counterbalance the attraction of driving alone to work.

In an update of the TransitCenter’s 2014 study of commuter tax benefits, researchers conclude that, even with parity, as long as parking is free people will continue driving. Complicating matters further, technical parity between the tax benefits of transit and auto modes only gets the transit commuter so far; employer participation in the transit tax benefit is voluntary. Nationally in 2015 only about 14 percent of employers participated.

Blunt the impact of employer-subsidized parking through parking cash out programs to give employees a choice of a subsidized parking spot or the cash equivalent.

Provide education and encouragement to use transit as Panasonic did in its move to Newark

Incorporate first- and last- mile connections to make taking transit a more useful option. Currently, the tax credit does not cover expenses for options like bike share, which is increasingly viewed as part of a transit system.

Pass municipal laws similar to New York City’s law requiring employers with more than 20 full-time employees to offer the transit tax benefit. The city does not require the car and parking benefit to be offered, but directs employers to the federal regulations if the business wants to also offer this program.

Parity in the commuter tax benefit is an excellent first step in generating changes in travel behavior, but to get the type of mode shift to transit that will truly impact air quality, safety, and roadway congestion, policy makers need to adopt additional incentives.